October 06, 2008

A Recession's Impact: Lower Expectations Across the Board

The stock market is a disaster.

Banks are going under, and massive financial institutions are being bailed out. Companies are announcing hiring freezes and layoffs. And just about everybody has less money now than they did last month, or the one before that. While many of these perceived losses are quantifiable (on paper), more widespread are the losses that cannot be quantified, as people and companies cast off their optimism, and exchange it with a dark reality.

Those of us who made it through the last recession have seen this play out before, and others, a few times as bust follows boom, and back again. This time, the bust just might be deeper, and its impact further felt. I made a handy chart to see how people here in the Silicon Valley might be adjusting their expectations - from personal goals to family, possessions and career. In every aspect, I think it's safe to say that many are choosing door number three.

How a market changes one's goals - in chart form...(Feel free to reuse the image on your blog)

With all the bad news out there, have you already made some of these choices? I'll likely be keeping my 1998 Mercury Tracer going just a bit longer, and despite the twins, I don't see us moving out any time soon, as demand for housing has cratered. Stocks I held just last week are worth 80 cents on the dollar today, and it could be time to buckle down unless things turn around soon.